Yesterday the USDJPY hit a low of 157.15 at GMT 07:00 amid growing concerns over the situation in the Middle East, after which upward momentum strengthened, reaching a high of 157.97 shortly after GMT 11:00. However, the rally stalled just short of the 158-yen level, and trading for the day closed at 157.69.

Today the USDJPY has seen broad risk-off sentiment driven by concerns that the U.S.-Iran war could be a prolonged conflict. After hitting a high of 157.86 around GMT 00:00, the pair drifted lower, touching a low of 157.21 shortly after GMT 04:00.

Looking at the 1-hour chart of the USDJPY (as of GMT 05:20 on March 4), there is no clear directional bias, though the pair has dipped below the minus-2 standard deviation band and appears to be attempting a recovery back within the band. The key question now is whether this will develop into another test of the 158-yen level.

(20-period Bollinger Band, showing ±1 and ±2 standard deviations)

The main economic indicators for today are as follows:

• GMT 13:15 U.S. February ADP employment change
• GMT 14:45 U.S. February Services Purchasing Managers Index (PMI)
• GMT 14:45 U.S. February Composite Purchasing Managers Index (PMI)
• GMT 15:00 U.S. February ISM Services PMI
• GMT 19:00 U.S. Regional FRB economic reports